Committee recommends raising output by 1 mln bpd under OPEC+ deal

VIENNA, Jun 22 (PRIME) -- The ministerial committee to monitor the implementation of the OPEC+ oil production cut agreement has recommended raising the output under the deal by 1 million barrels per day, and the recommendation contains special provisions for some states, Russia’s Energy Minister Alexander Novak told reporters late on Thursday.

“There will be a recommendation to OPEC and non-OPEC (meeting)… to consider raising the output (under the deal) by 1 million barrels per day,” he said.

Novak also said that the average oil price in January–May was 28% higher than in the same period of 2017.

“An acceptable situation has appeared on the market. The market can see the success of our efforts to reduce the (global crude) reserves and reacts… Investments return to the sector. They rose 6% in 2017 and keep growing this year,” he added.

The minister said that the participants of the agreement see signs of a stable balance appearing on the market, and now it is important to avoid overheating.

Saudi Arabia’s Energy Minister Khalid Al-Falih said that the recommendation to boost the output is only nominal, and the real increase will differ.

“We have nominally recommended the OPEC conference on Friday and the meeting of ministers of 24 states (OPEC+) on Saturday to boost the output target by 1 million barrels per day from the quotas set in 2016, but we mean that the real increase will differ,” he said and added that growth will be gradual and may take weeks or even months.

He also reiterated that commercial crude reserves of the Organization for Economic Cooperation and Development (OECD) have fallen by 370 million barrels since the OPEC+ agreement came into force and will decline by additional 300 million barrels in July–December under the current terms of the deal.

Iraq's Minister of Oil Jabar Ali Al-Luaibi said that Iraq proposed to put off revision of the deal to September, but the position was not supported by other participants.

The meeting was attended by representatives of eight counties besides the members of the monitoring committee including Iran, Iraq, Libya and Nigeria.

In November 2016, OPEC and non-OPEC states agreed to reduce their oil production to rebalance the market. Russia joined the agreement in December 2016 with a promise to cut output by 300,000 barrels daily compared with the level of October 2016. The agreement was prolonged until the end of 2018 in November 2017.

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